​Russia’s biggest bank halts foreign currency personal loans

Sberbank has temporarily suspended giving foreign currency loans to individuals. Experts say other Russian banks are not likely to follow.

Russian banks aren't going to suspend foreign currency loans to
individual Russians as they have just simplified credit product
operations. Experts suggest Sberbank’s ruble-only loans have a
more political character.

The bank said its April 1 decision was intended "to optimize
the structure of the current portfolio and its stable behavior in
the future, in case of any foreign currencies exchange rate
fluctuations ".

"The bank preliminarily analyzed the needs of the clients and
revealed that the current demand for loans can be completely
satisfied with rubles without losing any advantages for the
Sberbank products, including stocks offers," the Prime news
quotes Sberbank officials.

In 2013 Sberbank issued $50 million of foreign currency loans,
which account for 0.07 percent of the $68 billion loaned. 90
percent of the foreign currency loans were consumer, 9 percent
mortgage, and 1 percent was for vehicles.

"Sberbank’s approach is a normal move towards simplification:
to get rid of products which don't generate income," Igor
Bulantsev, the chairman of Nordea Bank said.

He says many Russian banks have already managed to orientate
their activities and simplify credit product operations.

"Taking into account the transition towards a floating
exchange rate for the ruble … it is normal for people to take out
loans in the same currency they spend, in same currency of the
country" — he added.

However, Bulantsev said Nordea Bank isn't going to do away with
foreign currency loans.

"Now their share is slightly less than 15 percent. We feel
quite comfortable because when we give out foreign currency
loans, we perform serious stress tests on the borrowers to make
sure they can pay the money back. Taking into account our
approach we don't see any serious risks to ourselves and our
clients," the banker said.